Doing the Math on Detroit Free Press, News Big Gamble

The Detroit Free Press and The Detroit News will be offering fewer days of home delivery beginning in 2009; the math on discontinuing home delivered editions several days of the week is straightforward. It makes a dent on several elements of the high cost structure that newspapers have a hard time supporting anymore with diminished advertising revenue. Spending on paper, delivery and staffing the press room and newsroom all will come down. If those savings exceed the loss of advertising and circulation revenue, the move will be successful.

A couple of factors tilt the odds in favor of such success. All days of the week are not created equal in advertising revenue. A typical metro books as much as 50 percent of total ad revenue on Sundays and the majority of the rest on a day or two near the end of the week when readers plan recreational activities and shopping.

There is at least a chance that advertisers on the soft days of Monday and Tuesday will move to other days or to the newspaper’s Web site, or in the Detroit plan, to condensed versions of print available on the off days.

So scaling way back four days a week is not tantamount to tossing away three-sevenths of advertising revenue.

On the cost side, most of the printing and delivery operation will shift from a seven-day week, and the online-centric days will require fewer reporters and editors. (UPDATE: Even so, Free Press Publisher David Hunke said at a press conference that there will be no newsroom layoffs or buyouts now at his paper or the News.)

Part of the cost pain in 2008 came with sharp increases in the price of newsprint and gas. Though both have eased lately, the paper could potentially save big in those areas.

The perils of the strategy are more subtle. I wonder whether it will spur print advertisers to thinking, “If they don’t think it’s worth publishing every day, maybe we should re-evaluate what we are spending in the newspaper.”

Reader reaction is even trickier to predict. Research shows that many spend much more time with the paper later in the week and still more on Sunday than earlier, when they are busiest with work. Nearly all big papers now offer weekend subscription packages for those readers who prefer to skip the first part of the week entirely.

But what of the loyal seven-day subscriber? The move essentially says, “We know you like to have a paper every day, but we cannot afford to give you one that frequently.” Telling readers they do not need a paper every day strikes critics of the strategy as a classic slippery slope, driving them to online alternatives that may or may not include heavy attention to the paper’s own Web site.

An even tougher case is those readers for whom print is more than a medium for getting the news. The physical paper can be part of a daily routine, unfolded and scanned over a first cup of coffee. Those with the hard-wired print habit include older readers (and some younger ones), many of whom will not find Detroit’s alternative of a condensed version or the Web site an attractive alternative to daily delivery of a full newspaper.

I’m aware, though, that too much deference to reader habit can be a path to locking into the same-old-same-old that is no longer working.

Though the Detroit announcement will come as a shock to readers and many journalists, the days-of-the-week option has been kicking around in theory among those on the business side for at least five years. I remember first seeing it in a project of the Newspaper Association of America titled “Horizon Watching” that envisioned the future of newspapers.

An upside is that if readers and advertisers mostly accept the change, that could pave the way to a full flip to online-only several years hence — an option I discussed in the first post of the Biz Blog a little over a year ago.

But a corporate newspaper executive with whom I spoke with recently on a non-attribution basis said the move makes sense now only as a response to financial necessity. He thinks those early days of the week draw readers in and keep them around for the end of the week when the serious print advertising money is made. And print remains 85 to 90 percent of total advertising revenue.

One exception, the executive suggested, might be smaller papers that have experienced deep staffing cuts. If they can produce stronger editions by redistributing resources to fewer days of the week, they ought to do so.